Intangible Assets

12 Months Ended

Dec. 31, 2012

Intangible Assets

Intangible Assets

Note 4. Intangible Assets

        Intangible assets are reported in other assets in our consolidated balance sheets and consist of the following (in thousands):

	2012			2011
Indefinite-life intangible asset—Pullmantur trademarks and trade names	$	218,883		$	225,679
Impairment charge		(17,356	)		—
Foreign currency translation adjustment		3,339			(6,796	)
Total	$	204,866		$	218,883

        During the fourth quarter of 2012, we performed the annual impairment review of our trademarks and trade names using a discounted cash flow model and the relief-from-royalty method. The royalty rate used is based on comparable royalty agreements in the tourism and hospitality industry. These trademarks and trade names relate to Pullmantur and we have used a discount rate comparable to the rate used in valuing the Pullmantur reporting unit in our goodwill impairment test.

        As described in Note 3. Goodwill, the continued deterioration of the Spanish economy caused us to negatively adjust our cash flow projections for the Pullmantur reporting unit, especially our closer-in Net Yield assumptions and the timing of future capacity growth for the brand. Based on our updated cash flow projections, we determined that the fair value of Pullmantur's trademarks and trade names no longer exceeded their carrying value. Accordingly, we recognized an impairment charge of approximately $17.4 million to write down trademarks and trade names to their fair value of $204.9 million. This impairment charge was recognized in earnings during the fourth quarter of 2012 and is reported within Impairment of Pullmantur related assets within our consolidated statements of comprehensive income (loss). See Note 13. Fair Value Measurements and Derivative Instruments for further discussion.

        If the Spanish economy weakens further or recovers more slowly than contemplated or if the economies of other markets (e.g. France, Brazil, Latin America) perform worse than contemplated in our discounted cash flow model, or if there are material changes to the projected future cash flows used in the impairment analyses, especially in Net Yields, an additional impairment charge of Pullmantur's trademarks and trade names may be required.

        Finite-life intangible assets and related accumulated amortization are immaterial to our 2012, 2011, and 2010 consolidated financial statements.